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Financial Services Law Insights and Observations

FinCEN addresses efforts to counter business email compromise schemes

Agency Rule-Making & Guidance FinCEN Fraud Anti-Money Laundering Of Interest to Non-US Persons

Agency Rule-Making & Guidance

On July 16, the Financial Crimes Enforcement Network (FinCEN) discussed efforts designed to restrict and impede business email compromise (BEC) scammers and other illicit actors who profit from email compromise fraud schemes. BEC schemes, FinCEN reports, generally involve “criminal attempts to compromise the email accounts of victims to send fraudulent payment instructions to financial institutions or business associates in order to misappropriate funds or to assist in financial fraud.” An updated advisory provides current operational definitions and general trends in BEC schemes, information concerning the targeting of non-business entities and data by these types of schemes, and risks associated with the targeting of vulnerable business processes. The advisory also discusses opportunities for information sharing between financial institutions concerning subjects and accounts affiliated with BEC schemes in the interest of identifying risks of fraudulent transactions and money laundering. An in-depth strategic Financial Trend Analysis of Bank Secrecy Act (BSA) data explores industries targeted by BEC scammers as well as employed methodologies, and highlights BSA information collected by regulated financial institutions. Suspicious activity report highlights reveal a nearly tripling of attempted BEC thefts—from $110 million per month in 2016 to $301 million per month in 2018 on average. FinCEN’s release also discusses its Rapid Response Program as well as international information sharing initiatives addressing BEC schemes and associated fraudulently-induced transactions.

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